I've been experiencing what is apparently a common problem with the M46 (?; 4 speed + electronic OD) transmission: difficulty shifting into first and second, and occasional crunch when shifitng into reverse. I have noticed that the first, second shifting problem gets more pronounced as the car warms up. The car is just shy of 199K miles.

I took it to a mechanic yesterday, and he tells me that the problem is not in the clutch, but inside the transmission. Bottom line: if he takes it out and can repair it, it will cost about $1000; if he has to replace it with a used transmission, it will be around $1500, plus another $250 if he replaces the clutch plate, etc.

Yikes.

So, my questions are, does this seem right? (I realize it's hard to make a diagnosis indirectly.) Also, what is the worst case scenario if I do nothing?

Is there any middle ground solution?

Thanks in advance!

Joe